The week ended on a positive note for UK stocks as they tracked gains seen Stateside and a positive performance amongst miners managed to offset a slump across the insurance sector.

The FTSE 100 closed up 27.26 points at 6,615.58, up 58.41 or 0.89% on the week.

It was something of a turbulent day for the UK market, which rose early on before dipping around lunchtime after it was widely reported that the Financial Conduct Authority (FCA) is planning to look into 30m insurance policies sold between the 1970s and 2000 on the back of concerns that they may have contained ‘unfair’ terms.

However, stocks recovered on the back of a strong start over in the US, which came after personal spending and incomes increased last month, while markets shrugged off a gauge of consumer confidence that marginally missed expectations.

Personal (Other OTC: PRBDF – news) spending increased at a month-on-month rate of 0.3% in February, up from a revised 0.2% rise the month before and in line with analysts’ forecasts. Personal incomes already rose by 0.3%, as expected.

Senior US Economist Paul Dales from Capital Economics said that the rise in expenditure was due to another large increase in medical spending: “This is because those people who are now covered by Medicaid for the first time or who have recently signed up for a private policy have started to consume medical services. With more people having enrolled this month, the effects of the Affordable Care Act will boost spending in March too.”

Meanwhile, the final reading for the Thomson Reuters (Frankfurt: TOC.F – news) /University of Michigan index of consumer sentiment was revised to 80 in March, up from the initial estimate of 79.9 but under the previous month’s reading of 81.6. This was the lowest level since November.

UK Q4 current account deficit comes in bigger than expected

Back in the UK, question marks grew over the durability of the UK economic recovery after the country’s fourth quarter current account deficit came in much higher than expected.

The deficit between October and December was £22.4bn, the second largest deficit on record after an all-time high of £22.8bn in the third quarter, according to the Office for National Statistics (ONS). Economists had expected a deficit of about £14bn.

As expected, the ONS confirmed that the economy expanded at 0.7% in the fourth quarter, but 2013 annual GDP was revised down to 1.7% from the previously estimated 1.8%.

In other UK news, National Energy Action (NEA) warned that unless the UK government and devolved administrations take urgent action in stopping the cold-homes crisis, then targets to remove fuel poverty will be missed.

The UK Fuel Poverty Monitor claims that current government measures to tackle fuel poverty are “inadequate to mitigate the effect of rising energy costs and the impacts of the economic situation and changes to welfare benefits”.

Insurers and miners at polar ends of index

Insurance groups were hit by the news the FCA news, which also prompted RBC Capital to lower its target price on a number of stocks in the sector, including Resolution (from 400p to 390p), Standard Life (LSE: SL.L – news) (from 450p to 440p), and Aviva (Other OTC: AIVAF – news) (from 500p to 495p).

Randgold Resources (Dusseldorf: RGR1.DU – news) was also a top performer after saying that gold production would top 1m ounces in 2014, compared with the 910,364 ounces produced last year.

Investec (LSE: INVP.L – news) gave Smith & Nephew (LSE: SN.L – news) a lift after upping its rating on the stock from ‘add’ to ‘buy’ and hiking its target price by a third. The broker said that the medical equipment maker is “beginning to look like a growth stock again”.

The passing week was another relatively narrow range inside Weekly bar, continuing the slow advance upwards. The signs of strength...

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